The Changes Of Audit Fees Under New Auditing Standards

In 2006, the new Auditing Standards was issued. There are so many differences between the new Auditing Standards and the old, so the auditing market would be changed a lot. This paper is about the changes of auditing fees influences by the new auditing standards.I had collected the data from annual financial reports on quoted companies of Shanghai and Shenzhen Stock Exchange. The scale of the data is from 2004 to 2007. The classical model of auditing price is Simunic Model, which is used in this paper. One of the impediments to understanding the auditing service is the ambiguity of the relationships between auditors, external financial statement users, and audited companies. In this paper, I assumed that the auditing price was determined by audited companies, auditing service, auditors, and was influenced by the new audit standards.After correlation test and multiple regression analysis, I had found that the year factor had not influenced the audit fee whether in 2004 to 2005 or in 2006 to 2007, but in 2005 to 2006, the level of the price was increased because of the auditing standards. However, this change was not marked. That means that the audit price was not influenced a lot even though the quantity of auditors' work was increased much under new audit standards. The reason is that the competition in auditing market is fierce, and the auditors have to control the price to compete for clients. This paper was also proved that the three main factors determined the auditing fees are the audited companies, auditing service and auditors.